Help on an Ohio return

[WhiteOleander]

I am preparing an Ohio return for a lady who is a full resident. She has two W-2s with the OH portion filled in for the Ohio School District information. She also has two W-2s from Texas. They have no info for the School District info. Does this info need to be input for the School District info as well? If so, do I use the school district code listed on the other W-2?

Thanks for any help.

[Koss]

School Distrct Tax

Which school district is it?

It actually does make a difference. [LMAO]

In Ohio, there are two different types of school district tax.

If she is a full-year resident of Ohio, how did she earn wages in Texas? Working from home or something?

This matters, because the school districts impose tax either on the Ohio AGI, or on the Ohio earned income.

So if she was physically working in Texas, the school district tax would not be applicable, unless...

unless she was somehow working in Texas while living in Ohio, which doesn't seem very likely.

BMK

[WhiteOleander]

She is a nurse. She worked at a couple places in OH and in the summer, came to TX and worked here for the summer. She is a resident of OH.

One of the OH W-2s has OH001Columbus. The other one from OH is NWALBY.

I appreciate the help.

[Koss]

Ohio Localities

Those are not school districts.

Those are Ohio cities: Columbus and New Albany.

If she was not living in Ohio while she was working in Texas, then she will not have any liability to an Ohio city on the wages earned in Texas.

She may or may not have to file a tax return for the city where she lives in Ohio. Some cities require all residents to file a return; others require a return only if there is a tax due. But I don't think any city in Ohio will attempt to tax wages that were earned in another state, if she was actually living in that state at the time.

I am not disputing your position that she is a full-year resident of Ohio. That's a separate question. Cities in Ohio are extremely weird, and their definition of residency, for city tax purposes, is not the same as the definition used by the State of Ohio.

If you are not at all familiar with Ohio municipal taxation, you may want to shoot me an e-mail. It can get really complicated really fast. Or it may be very simple, and she may not have to file a city return at all.

The first thing you need to know is what city she lived in during 2013 in Ohio. But even that question is not as easy as it sounds. You cannot rely on the mailing address. The boundaries of the cities do not always coincide with the addressing system used by the postal service.

I'm not kidding. You can't make this s**t up.

Only in Ohio.

BMK

[WhiteOleander]

Thanks, I'll get with my client and get back to you.

[Koss]

Ohio Cities

With your client's street address, you can use this tool to determine which city, if any, has tax jurisdiction:

http://www.tinyurl.com/ohmunitax

Type in only the street address and the zip code. Do not fill in the name of the city.

Try this address as an example:

2826 Sussex Place Dr
43123

The results are in the box that says "Found Address." What you will see is that this particular house has a postal address in Grove City, but the physical city is Columbus. That means that the house is in Columbus for city tax purposes. It also means that they get Columbus trash collection service, and Columbus police and fire services.

Someone living at this address would file a city tax return for Columbus--not Grove City.

If the "physical city" field is blank, that means that the house is not in any city, i.e., the house is in an unincorporated area. And that usually means they do not have to file a city return. City tax will still be withheld by the employer for the city where the person works. But there is no filing requirement if the tax is properly withheld.

In the box at the bottom, it will tell you which school district they live in. It will give you the four digit code that you need for the Ohio state tax return, and it will tell you if there is a school district tax. In the example I gave you, the house is in the South-Western City School District, and the code is 2511. But the tax rate is zero, which means that this district does not have a tax. Therefore, no school district tax return is required.

Finally, at the very bottom, it tells you what the city tax rate is for the physical city where the house is located.

Factoids:

If there is an applicable school district tax, most software can handle it properly if you input the correct information. School district tax is administered by the Ohio Department of Taxation. It is a separate return from the state return, but it is processed by the Ohio Department of Taxation, and it can be electronically filed, usually as a subset of the state return.

City income taxes are totally unrelated to the school district, and they are not administered by the Ohio Department of Taxation. Each city has its own little operation, and many have their own tax form. No joke. It is utter insanity. Many cities cannot be filed electronically. Meanwhile, some cities outsource their tax department to an agency such as RITA (Regional Income Tax Agency). RITA handles tax administration for about 40 Ohio cities, and they do accept electronic filing.

Some software simply doesn't support Ohio cities at all. There are too many variables, and it's not cost efficient for the developers.

Drake does have Ohio cities. The forms don't always work right, and we often have to manually override certain fields. But it's better than doing them by hand.

BMK

[AJsTax]

Ohio cities

Most Ohio cities and RITA have taken the stance that until you make a positive stance to change your residence it does not matter where you earned the money it is taxable to your residence city. For example, city won, person has lived in Saudi Arabia for 2 years teaching, but is still as US resident, and ohio resident and therefor must be a city resident if home WAS in a city. She does not want to give up US residence so will be taxed by the city.
So if the Texas income was temporary jobs she will most likely owe the city if she actually lived in a city. Can not tell that by the W-2.

[WhiteOleander]

Ok why do people think they don't need to tell us things!!!!

When I prepared her 2012 return, she told me she was moving to Ohio. She had lived there before her husband died. She was going to go back. I was really surprised to have her mail her tax info to me for 2013. I talked to her on the phone. She said she worked a short time in TX. So that's why I thought she was a full year resident.

When I called her today, she admitted that she actually didn't get to OH until July of 2013. So, the jobs in TX were while she was still a resident here in TX. And then she told me that actually she now lives in Florida!!! What!!!

I told her I really need the FL address to put on her tax return. She does not plan to return to OH. She moved to FL in 2014.

So, all this to say, thanks Koss and AJ. I ran the address she lived in part of the year in OH through the site AJ gave me. It shows her city is Galena. I'm not sure if I need to do the school district return.

I appreciate your help.

[Koss]

Ohio Localities

School district and city tax are two different things.

If the locator identifies the physical city as Galena, Ohio, then your client will need to file a RITA tax return.

What is the name and code number of the school district identified by the locator?

If it's Big Walnut 2101, then yes, they do have a school district tax for anyone who lives in that school district, your client will need to file an SD-100.

It sounds like there is no longer a question of "earning wages in Texas while living Ohio."

But I am going to concede that if that was the case, it is an unsettled area of the law, and AJ may be right. Such wages could arguably be subject to a local city income tax in Ohio. But I don't think that's the case for your client, based on the new fact pattern you have presented.

BMK